Mental health problems are a global epidemic. The American Psychiatric Association reports that 17m American adults had at least one major depressive episode in 2017, with 40 million – nearly 20% of the population – suffering from an anxiety disorder. In the UK, one in six 18 to 64-year-olds were prescribed antidepressants at some point in 2018. And that’s just the ones that are recorded.
Perhaps the most arresting statistics are for young people. Suicide rates are rising and mental health problems now affect around one in ten young people. At the same time, there remain limited resources to address the problem.
A vast problem requires a creative solution: Alex Tew and Michael Acton Smith are the brains behind Calm, an app with the strapline ‘sleep more, stress less, live better’. A ‘Nike for the mind’, it is designed to help users deal with their mental load through meditation.
The pair met on a boat. Both had already seen considerable success with other ventures and bought the domain name Calm.com with a hazy plan to help people relax. However, for a while it remained on the backburner while they pursued other projects.
Alex had been meditating since he was a teenager, while Michael was a sceptic, even though he desperately needed to relax. He had founded Mind Candy, the gaming company behind Moshi Monsters and presided over its meteoric success, only for it to fade from popularity as children turned to smartphones and tables. The stress of managing the business caused bouts of insomnia, exhaustion, headaches:
“I was a typical entrepreneur. I was always ‘on’, not sleeping well. Even with all that, I thought the idea of meditation quite ‘out there’.”
It was only after a holiday in the Swiss Alps, booked to get away from the stress of his business, that he had his ‘lightbulb’ moment. He finally tried meditation and saw the world in greater clarity. He devoted his full-time attention to Calm.
In building the first iterations of the app, the pair worked with a teacher called Tamara Levitt who remains head of content at the group. Alex said she was a key part of the story: “A brilliant writer with an incredible voice.”
It took a while to get momentum and the pair suffered the nail-biting moments familiar to most entrepreneurs, notably around funding. It was 2017 before meditation became mainstream. Alex said: “It moved from being weird and out there to being considered a really valuable tool to manage stressed-out lives. We are at peak screen, peak social media. Meditation is suddenly cool. We were in the right place at the right time.”
The app has now seen 80 million downloads and is now being downloaded at a rate of one per second. The pair got to 8 million downloads without any marketing. Word of mouth was vitally important. Michael says:
“When people used it, they found it increased their resilience, increased their calm, they became our best advocates.”
The group also had a supportive media – journalists recognised that it was a ‘hot topic’ and started writing about it.
Initially, the focus was all around meditation, catering for various levels of skill.
Introducing the ‘Daily Calm’ proved an inflection point. “People loved that and it helped make it more of a habit” says Alex
He adds: “We started to recognise that people who were struggling to sleep would often use the meditation programmes to help them fall asleep. With this in mind, we created new bedtime stories, read by Stephen Fry and Joanna Lumley. 180m people listened to it and it proved a crucial shift for the business.”
Initially, the business was focused on London and San Francisco, with Alex and Michael concluding that they would provide more receptive audiences for their product. At the same time, California had more capital willing to back early-stage technology businesses.
Nevertheless, selling their vision to potential backers and recruits was tough in the early years. Michael says:
“We were competing with lots of extraordinary companies, also changing the world in different ways. Convincing investors was tough and it took many years to raise a series A. However, after that, the floodgates opened. Health and wellbeing is now a multi-million dollar industry.”
They have recently spread their reach beyond the UK. Initially the app was just in English, but they have now built a small international team. It is now available in German, Portuguese, Korean, Spanish and French.
What’s next? They have all sorts of projects in the mix. Michael says: “How can we bring calm into the workplace to make people
more productive and happy? How can we make sure they have the sleep they need to improve resilience? Can we help new mothers?
“We want to find ways to expand the brand offline to bring it across the world, perhaps buy an island? Mental fitness is as important as physical, we’re seen to be creating Nike for the mind. The mind is the centre of everything.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.